​A Rain Barrel Is a Container That Captures and Stores

Multiple Choice

​A rain barrel is a container that captures and stores rainwater for landscape and garden use during dry periods. Rain barrels provide an external benefit to the community through water conservation. If the government offers a per unit subsidy on rain barrels equal to the per-unit externality, then

A) ​the after-subsidy equilibrium quantity of rain barrels will be less than the socially optimal quantity of rain barrels.
B) ​the after-subsidy equilibrium quantity of rain barrels will be more than the socially optimal quantity of rain barrels.
C) ​the after-subsidy equilibrium quantity of rain barrels will equal the socially optimal quantity of rain barrels.
D) ​market incentives will be distorted and move the allocation of resources away from the social optimum.